Missing Money

The state auditor criticizes the school district's accounting.

The Seattle School District's chief financial officer, Geri Lim, has resigned in the wake of the district's latest state audit failure—and her reaction to it. Lim says she was not fired for her remarks and that her decision to leave was made independently. "The audits really had nothing to do with my decision," she says, citing personal reasons including the need to take care of her ailing parents in Hawaii. District chief operating officer Raj Manhas says, "This is something she wants to do. She has been with us seven years and has done a lot of wonderful work."

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But he also says, in contrast to Lim's recent remarks, that the district was concerned about how it accounts for the small-ticket items questioned by the state auditor. Lim had earlier told Seattle Weekly that the 47,600-student district has intentionally focused its spending oversight on big- ticket items in deference to such areas as missing student body funds, time-card cheating, and "lost" computers. "We have to figure how to do the best we can with the resources we have," she says, and that means weighing "the cost of making sure all things run correctly vs. taking money out of the classroom."

Says Manhas: "In reality, on the little stuff, we do need to worry about it, and we do worry about it. But that was not an issue" in Lim's departure.

Lim, 59, was formerly the district's budget manager and became chief financial officer in 1997. She says she's sorry to leave the district, but has traveled to Hawaii four times in the past 12 months to help her ailing parents. "My heart and my 8-year-old grandson remain with the Seattle Public Schools after my departure from this office," she says.

It's a major personnel change for the school district, particularly given its audit history, but Lim's exit and the critical audit have received little or no notice in the daily press. In its July 26 findings, the state questioned about $70,000 in district spending, finding numerous instances of apparent time-card and check forgery; of cafeteria help putting money in apron pockets; and of undocumented district meal tabs, including a $2,000 barbecue and a $250 bar charge ("The New Math," Aug. 8). The district has also indicated it is taking legal action or possibly pursuing criminal charges against some employees. Washington state Auditor Brian Sonntag says the time-card manipulations from the 2000-2001 school year may have cost taxpayers $46,000.

This is the sixth year in a row—all on the watch of now-superintendent Joseph Olchefske—that the state has found problems with district accounting controls. Though the questioned items constitute small change in the district's $357 million budget, the spending and accounting problems cited by the auditor add up to hundreds of thousands of taxpayer dollars since 1996.

Sonntag, who had no comment last week on Lim's resignation, has been urging the district to follow the old rule: If you take care of your nickels and dimes, the dollars will take care of themselves. His reviews indicate that money from high-school ticket and yearbook sales and auto shop fees, for example, is sometimes unaccounted for or has been ripped off.

Sonntag says the district has at times been unresponsive to the losses and, in the latest audit, was less than cooperative with his staff. District officials also blew a chance to catch some thieves green-handed: Rather than take surveillance video of cafeteria workers apparently pocketing lunch money from students—which the auditor's staff had earlier witnessed in person—the district sent security officers to the cafeteria, who then told the food services manager of their mission. "Kind of defeats the whole purpose," Sonntag says.

The string of critical audits date back to the first days that Olchefske took control of the district's funds. A onetime investment banker, Olchefske was appointed the district's chief financial officer in 1995. In 1997, he became chief operating officer and a year later became acting superintendent upon John Stanford's death. He was named superintendent in 1999. His school district bio notes that Olchefske made great strides as chief financial officer, and as a result of some of his work, "the District's credibility as a steward of public funds improved dramatically."

But all during that time, Sonntag's office cited repeated breakdowns in the district's accounting practices, including sloppy record keeping, mishandling of cash receipts, and assets lost from the books.

Despite those failures, the district insists it is getting a grip on its money. "Joseph [Olchefske] and I did review the [current] audit," says Manhas, "and we will follow up. In a large organization, there will be problems like this, but let me say it's nothing we want to ignore."

Asked if he disagreed with Lim's characterization of district policy—paying less attention to the small change—Manhas says, "I don't really want to comment on that. But I would say that from my perspective, we want to take care of all of these problems."